ridethepig

ridethepig | Dollar Strategy Note

TVC:DXY   U.S. Dollar Currency Index
πŸ“Œ A good time to review and update our main battleground

Another moment here which is going to force decision, buyers are needing to complete at a minimum their ABC targets while the extension targets still remain locked. While the other side of the coin comes from those looking to play the long term structural decline in the dollar, and sellers are flirting to react sharply at the highs in the range with a plan to defend resistance.

How did we end up here ❓

It boils down to this long-term macro chart which looked very promising for sellers:


Medium term:


The further we zoom in, the more details we can add...


To add more context, since 2018, we have been tracking the highs in dollar and we shall have to content ourselves with the "throwback" chart which briefly explains the truth behind the technical opening and structural decline.


What does this all mean ❓

We are trading inside an impulsive macro leg to the downside with MT and LT targets in the DXY located at 88.2x and 74.8x respectively. This does not rule out a pullbacks/retracement, and it would be perfectly valid for buyers to break the chop to the topside only to receive another hammer later in the year / early 2021. A continuation of dollar strength and breakout of the range would put pressure on the soft hand sellers that are unaware of the larger forces in play, capital flows are not linear in direction.

From a technical perspective we can play the breakup with a momentum gambit, taking 94 will open 94.6x and 94.8x for a quick visit. Anything else beyond that is currently locked for buyers. If you are a seller here you are looking to sell as cheaply as possible and fading a break of 94 handle is in play.

Thanks for keeping the feedback coming πŸ‘ or πŸ‘Ž
Comment: πŸ‘€ on 94.6x
Comment: An important monthly closing:

Comment: Time to start paying attention... For those tracking DXY we are in 'no cross no play' mode until further notice:

Comment: One to watch for those who are looking for shorts ...
Comment: WATCH for the break, a squeeze to 95.11 will make it a lot easier to play the next ride down -

Comment: A quick update here as intentions of both sides becomes crystal clear...

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Comments

For those tracking EURUSD:

+3 Reply
yansy84 ridethepig
@ridethepig, heading to wave 5 now ?
Reply
Thanks, as always! I'm curious as to the relation between equities and DXY and gold/metals. It seems that equities are headed south soon, and yet, so do both DXY and gold. At least, this is the picture I can surmise from your impeccable work.I'm curious at to where you see a flight to safety ending up in relation to these three? And is it quite possible to see equities and the USD fall precipitously? Or am I reading your work all wrong and are equities headed up in the long term? Thanks!
+1 Reply
@ridethepig do you say we rally from here in stocks/metals/etc..?
Reply
Thanks for sharing mate!
Reply
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